With small-bank and thrift stocks languishing, market observers expect impatient investors to begin seizing the reins at underperforming institutions, in some cases pushing for outright sales of the companies.

Redwood Empire Bancorp of Santa Rosa, Calif., is a case where such change is under way. Under pressure from its largest investor, B. John Barry, the $437 million-asset company expanded its board Dec. 30, naming as directors two of the prominent Minnesota bank investor's hand-picked nominees.

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